Budget 2008 analysis

Today was a good day if you are involved in road charging technology, work in the engineering department of a Midlands university or have an automotive research and development company in India.On the other hand, if you spend a lot of time at the wheel, have a company car and drive anything bigger than a Mondeo 2.0-litre diesel, today will be memorable for all the wrong reasons.The top-line 'tax-grab' figures are that Vehicle Excise Duty will rack in £735m taxes in 2010-11, up from £465m next year.Thanks to pressure groups, the Government is making biofuel use less fiscally attractive. By happy coincidence, it now expects to grab an extra £550m in biofuel taxes by 2010-11.On the recommendation of Julia King (Vice-Chancellor of Aston University) it is also going to ‘write to the Indian Government’ to suggest setting up a joint R&D venture to build ‘low-cost, low carbon cars.’ Expect more on that odd announcement soon.The future fuel tax hikes are complex and hard to follow, so just remember no matter how much the price of a barrel of oil rises over the next two years, the Government is going to keep hiking its tax take.But it's the re-working of the VED ‘road tax’ bands to run from A-M, instead of A-G that is far more significant.From 2010, road tax drops significantly on engines returning under 185g/km. No surprise there.A few years ago a friend accompanied a group of Whitehall civil servants on a trip to study biofuel use in Scandinavia. The impression he got was that nobody ‘really needed’ a car that returns over 180g/km of Co2.Following that logic, above 225g/km cars will be hit with a serious ‘first registration’ road tax hike in 2010. If you are foolish enough to buy a car returning over 255g/km, the ‘first year’ tax disc will cost £950, followed by yearly discs costing at least £455.More ominously, the Chancellor said that the results of its investigations into road charging would be announced next year. I'd expect the result to recommend the use of ‘tag and beacon’ technology, which uses automatic charge cards mounted in the windscreen.The bad news here is that road charges are likely to be varied on engine size, like the future proposals for the London Congestion-Charge.So, what’s the future for driving in the UK, as envisaged by the current Government?First, if you drive a large-engined car, you'll be battered by ever-rising fuel taxes, much higher VED charges, potentially higher charges for local authority parking permits and, when road charging schemes start up in the next few years, you’ll be expected to fork out higher road tolls than other drivers.However, if you play the game, and slip into something with lower emissions, the Government will take less tax from you – certainly when compared to the dramatic rise in the cost of running the biggest and most thirsty cars.But, on this, the hypocrisy of the Government is clear. Treasury projections on the tax take from VED show it fully expects drivers to pay the extra and stick with powerful cars.The Government says it wants a shift to ‘greener’ cars, but its accounts actually show it expects drivers to keep paying handsomely for the pleasure of a bigger engine.

Hilton Holloway

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A-M, oh how strange to have maore tax bands for the 'enviroments sake' more like I want more money and you'll pay more. Browns in control and he knows it A-M indeed, Sir Alan Sugar's quaking in his 'Boots' and they state full well that we expect to keep the big cars on the road. It means we can get more tax and we'll make sure we do.

More moneygrabbing schemes from Brown and Co. and New Labour and not 'Enviromental' tax!

The UK is following Ireland with these "registration taxes".
Over here, you pay 30% registration tax (VRT) and 21% VAT on a new car over 1900cc. Then annual road tax of up to €1300 depending on engine size (that top rate is for 3001cc and over).
Come July the top rates are going UP to 36% VRT and €2,000 annual tax, but based on CO2 not engine capacity.
The obvious effect of this is that you see many fewer performance cars on the road, and many sub-1.5L small cars. Imagine paying almost £80k+options for a new M3, then £1500 annual road tax, and you see why. Even my cooking Suzuki Swift 1.3 cost the equivalent of £11.5k. When I had a Mini Cooper S, several people remarked that it had a large engine.
Once the taxes are in place, there is no turning back, as they are treated as general taxation and any proposal to reduce them is met with "but we'll have to close hospitals or the State will go bankrupt!".
Meanwhile, the politicians are driven around in 4L+ petrol Lexuses. Hybrids, generally, for sake of appearances.
Welcome to your future. It's shite.
John
(Dublin)

The UK is following Ireland with these "registration taxes". Over here, you pay 30% registration tax (VRT) and 21% VAT on a new car over 1900cc. Then annual road tax of up to €1300 depending on engine size (that top rate is for 3001cc and over). Come July the top rates are going UP to 36% VRT and €2,000 annual tax, but based on CO2 not engine capacity. The obvious effect of this is that you see many fewer performance cars on the road, and many sub-1.5L small cars. Imagine paying almost £80k+options for a new M3, then £1500 annual road tax, and you see why. Even my cooking Suzuki Swift 1.3 cost the equivalent of £11.5k. When I had a Mini Cooper S, several people remarked that it had a large engine. Once the taxes are in place, there is no turning back, as they are treated as general taxation and any proposal to reduce them is met with "but we'll have to close hospitals or the State will go bankrupt!". Meanwhile, the politicians are driven around in 4L+ petrol Lexuses. Hybrids, generally, for sake of appearances. Welcome to your future. It's shite. John (Dublin)

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Thanks for the feed and info on Irish taxes, ridiculous an £50K M3 becoming and £80K M3. And thanks for pointing out the hypocrisy of our poloticians who tell us not to drive them Co2 'polluters' and then have a 4 litree Jag temselves. When I'm older I'll buy Jags if the mayor of Brum and the PM does. If they beleive in climate change as real and not a excuse for tax. They need to lead by example and not be two-faced hypocrites!

What next from this neo-Stalinist lot? Will we be required to get a special pass to drive outwith what would be deemed a local region? Tax increases, be they the fuel duty increase of 2p or the VED increase is easy to impliment; likewise, parking tickets and speed cameras (or 14p on a bottle of plonk, et al), and yesterday afternoon, Ed Balls witters "So what?" from the front bench. So what that we are paying way over the odds when compared with other EU states for the pleasure (perhaps, "curse" may more apt) of motoring? So what that we have the worst road system of all the so caled G8 countries? So what that we have an appalling public transport system, which most do not wish to utalise late at night, for good reason?

We are treated with contempt by all three parties: they only want our vote, and once that is obtained they pursue their own agenda.

We are compared to other EU countries when it suits the politicians purposes, but on the basis of taxation, and transport per se, this is never put forward for comparison with the other major industrial countries, because it would show the UK in a bad light.

Final rant: Will these increases help the planet or child poverty? NO!

You know there are some words and phrases that get banded about with too much ease. Such as when people say the UK has a "third world public transport system", that the NHS is "a disgrace", that Arsenal losing to Man U is "a disaster". One of these phrases is "neo-Stalinist". Applying it to the current Chancellor, who is strictly from the John Major school of political charisma, is only done by people who are a. know nothing about the hundreds of thousands who died under Stalin, b. mentally ill or c. not very good at reading back what they have typed before they hit the "post" button.

You know there are some words and phrases that get banded about with too much ease. Such as when people say the UK has a "third world public transport system", that the NHS is "a disgrace", that Arsenal losing to Man U is "a disaster". One of these phrases is "neo-Stalinist". Applying it to the current Chancellor, who is strictly from the John Major school of political charisma, is only done by people who are a. know nothing about the hundreds of thousands who died under Stalin, b. mentally ill or c. not very good at reading back what they have typed before they hit the "post" button.

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Fully agree with you there.

You gotta keep in mind though that linguistic hyperbole is a national pass time in the UK. Our press in particular has made an art of exaggerating and sensationalizing most things; usually in a negative context. Take football for example; the national team wins a couple of matches and "we are among the best in the World". The same team then loses a couple of matches and "we are utter rubbish" etc. And of course, what the press witter on about relentlessly tends to find its way into the day to day language used by the likes of yours truly.

[quote RobotBoogie]only done by people who are a. know nothing about the hundreds of thousands who died under Stalin, b. mentally ill or c. not very good at reading back what they have typed before they hit the "post" button.[/quote]

Oh for God's sake, catch a grip ! Its just hyperbole as the previous writer said. The real point is that there are elements of Stalin's behaviour to his people that are comparable to the way our government treats us. You clearly missed his use of the word "neo-".

Utter contempt. That's all this government has for us. They say that they are doing it because "it is the right thing to do" as if that phrase justifies it all by itself and then qualify it with "anything else would be irresponsible". Spectacularly banal. If anyone believes that these measures will lessen climate change or assist in reducing child poverty (whatever the f**king f**k that means) then they need their heads examining. He may as well brought some sick puppies in a basket into the chamber and said that the increased tax would save their lives. This is spin and lies and an attempt to control behaviour by taxation.

How can he possibly say that this will encourage people to use more climate friendly cars when he then increases the tax for cars that are more environmentally friendly like those in the mid-bands ?

Vince Cable was then on Jeremy Vine's show today saying that he wants to get people out of private transport into public transport. What planet is he on ?

Our only hope is the Tories. Yes. I'm afraid its true. If you read this, David Cameron, we are fed up with being persecuted by silly taxes that demonstrably fail to achieve any of the reasons that are given for invoking them. If you want to win the election, reduce the burden of the motorist. We like our cars and we are sick and tired of lies and spin.